Hostname: page-component-586b7cd67f-rcrh6 Total loading time: 0 Render date: 2024-11-28T22:45:15.208Z Has data issue: false hasContentIssue false
  • English
  • Français

Moral Justice and Legal Justice in Managed Care: The Ascent of Contributive Justice

Published online by Cambridge University Press:  01 January 2021

E. Haavi Morreim
Get access Rights & Permissions [Opens in a new window]

Extract

Several prominent cases have recently highlighted tension between the interests of individuals and those of the broader population in gaining access to health care resources. The care of Helga Wanglie, an elderly woman whose family insisted on continuing life support long after she had lapsed into a persistent vegetative state (PVS), cost approximately $750,000, the majority of which was paid by a Medi-gap policy purchased from a health maintenance organization (HMO). Similarly, Baby K was an anencephalic infant whose mother, believing that all life is precious regardless of its quality, insisted that the hospital where her daughter was born provide mechanical ventilation, including intensive care, whenever respiratory distress threatened her life. Over the hospital's objections, courts ruled that aggressive care must be provided. Much of Baby K's care was covered by her mother's HMO policy. In the 1993 case of Fox v. HealthNet, a jury awarded $89 million to the family of a woman whose HMO had refused, as experimental, coverage for autologous bone marrow transplant in treating her advanced breast cancer.

Type
Article
Information
Journal of Law, Medicine & Ethics , Volume 23 , Issue 3 , Fall 1995 , pp. 247 - 265
Copyright
Copyright © American Society of Law, Medicine and Ethics 1995

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

On July 4, 1991, Wanglie died after more than a year in PVS, kept alive only by intensive medical life support. Although the HMO did not protest the expenditure, in fact it had no alternative because Minnesota State law forbids HMOs from placing financial limits on HMO policies. See Miles, S.H., “Interpersonal Issues in the Wanglie Case,” Kennedy Institute of Ethics Journal, 2 (1992): At 65. See also Miles, S.H., “Informed Demand for ‘Non-Beneficial’ Medical Treatment,” N. Engl. J. Med., 325 (1991): 512–15; and Angell, M., “The Case of Helga Wanglie: A New Kind of ‘Right to Die’ Case,” N. Engl. J. Med., 325 (1991): 511–12.CrossRefGoogle Scholar
Anencephaly is a condition in which the brain is completely absent except for the brainstem. It is defined as “congenital absence of the cranial vault, with cerebral hemispheres completely missing or reduced to small masses attached to the base of the skull.” See Dorland's Illustrated Medical Dictionary (Philadelphia: W.B. Saunders, 26th ed., 1981). Major portions of skull and scalp are likewise missing. Because of these anomalies, the anencephalic infant will never be conscious in any way.Google Scholar
Baby K's hospital bills were mainly paid for by Kaiser Permanente. See Gianelli, D.M., “Doctors Argue Futility of Treating Anencephalic Baby,” American Medical News, Mar. 21, 1994, at 5. Baby K died on April 5, 1995, of cardiac arrest. See Tousignant, M. Miller, B., “Death of ‘Baby K’ Leaves a Legacy of Legal Precedent,” Washington Post, May 7, 1995, at B3.Google Scholar
Fox eventually raised the money on her own, but died shortly after completing treatment. The jury found that the HMO's denial of funds delayed her treatment long enough to be a substantial cause of her death, and therefore that the refusal constituted bad faith, breach of contract, and reckless infliction of emotional distress. See Pollock, E.J., “Jury Tells HMO to Pay Damages in Dispute over Refused Coverage,” Wall Street Journal, Dec. 28, 1993, at B4; and Meyer, M. Murr, A., “Not My Health Care,” Newsweek, 123, no. 2 (1994): 36–38. Rather than being appealed, the case was later settled out of court for a substantially lesser amount.Google Scholar
In a study conducted for Kaiser Permanente, Southern California Region, Dr. David Eddy determined that, if the costly low-osmolar dyes are used for everyone instead of only patients at high risk for adverse reaction, the HMO's additional cost would be about $35 million. He also calculated some hypothetical opportunity costs: This money, instead of being used to enhance comfort and to avoid forty severe but nonfatal reactions, could alternatively avoid thirty-five breast cancer deaths, or 100 deaths from cervical cancer, or thirteen sudden deaths from cardiac disease, if used for improved preventive care and the like. See Eddy, D.M., “Applying Cost-Effectiveness Analysis: The Inside Story,” JAMA, 268 (1992): 2575–82.Google Scholar
See, for example, GUSTO Investigators, “An International Randomized Trial Comparing Four Thrombolytic Strategies for Acute Myocardial Infarction,” N. Engl. J. Med., 329 (1993): 673–82; GUSTO Investigators, “The Effects of Tissue-Plasminogen Activator, Streptokinase, or Both on Coronary-Artery Patency, Ventricular Function, and Survival after Acute Myocardial Infarction,” N. Engl. J. Med., 329 (1993): 1615–22; Farkouh, M.E. Land, J.D. Sackett, D.L., “Thrombolytic Agents: The Science of the Art of Choosing the Better Treatment,” Annals of Internal Medicine, 120 (1994): 886–88; Lee, K.L. et al., “Holding GUSTO Up to the Light,” Annals of Internal Medicine, 120 (1994): 876–81; Ridker, P.M. et al., “A Response to ‘Holding GUSTO Up to the Light’,” Annals of Internal Medicine, 120 (1994): 882–85; and Terry, K., “Technology: The Biggest Health-Care Cost-Driver of All,” Medical Economics, 71, no. 6 (1994): 124–37.Google Scholar
Daniels, N., “Why Saying No to Patients in the United States is so Hard,” N. Engl. J. Med., 314 (1986): 1380–83.CrossRefGoogle Scholar
Weiner, J.P. de Lissovoy, G., “Razing a Tower of Babel: A Taxonomy for Managed Care and Health Insurance Plans,” Journal of Health Politics, Policy and Law, 18 (1993): 75–103.CrossRefGoogle Scholar
Anders, G., “HMOs Pile Up Billions in Cash, Try to Decide What to Do with It,” Wall Street Journal, Dec. 21, 1994, at A1, A12.Google Scholar
Johnsson, J., “Price Quake Rattles Doctors, Hospitals,” American Medical News, Oct. 24, 1994, at 1, 18; and Mitka, M., “HMO Enrollment Tops 50 Million: Low Premium Costs Fuel Rapid Expansion,” American Medical News, Dec. 26, 1994, at 3.Google Scholar
Many MCOs withhold part of physicians' fees, salary, or capitation payment; many also add bonuses or even pay-back penalties based on resources used through the year. See Hillman, A.L., “Financial Incentives for Physician in HMOs: Is There a Conflict of Interest?,” N. Engl. J. Med., 317 (1987): 1743–48; Hillman, A.L., “Health Maintenance Organizations, Financial Incentives, and Physicians' Judgments,” Annals of Internal Medicine, 112 (1990): 1891–93; and Hillman, A.L., “Managing the Physician: Rules Versus Incentives,” Health Affairs, 10, no. 4 (1991): 138–46. More recently, many MCOs have switched to capitated arrangements that place physicians almost entirely at risk for the care provided.CrossRefGoogle Scholar
See Hillman, (1991), supra note 12.Google Scholar
See Eddy, , supra note 6.Google Scholar
To say that money saved can be used for other patient care does not mean that it will be. Other, less salutary uses might be made. A for-profit HMO might return savings to stockholders in the form of earnings, and virtually any HMO may return some savings to physicians as part of its incentive system. However, the negative is assured: Money spent on one patient within a financially closed system is not available for any other subscriber.Google Scholar
Veatch, R.M., A Theory of Medical Ethics (New York: Basic Books, 1981): At 285. For a useful summary of this line of thought, see Hall, M.A., “The Ethics of Health Care Rationing,” Public Affairs Quarterly, 8 (1994): 33–49.Google Scholar
Levinsky, N.G., “The Doctor's Master,” N. Engl. J. Med., 311 (1984): At 1573.CrossRefGoogle Scholar
Veatch, R.M., “DRGs and the Ethical Reallocation of Resources,” Hastings Center Report, 16, no. 3 (1986): At 38. For further discussion of the traditional view, see also Morreim, E.H., Balancing Act: The New Medical Ethics of Medicine's New Economics (Dordrecht: Kluwer, 1991): At 45; and Hall, , supra note 16, at 34–35.Google Scholar
Beauchamp, T.L. Childress, J.F., Principles of Biomedical Ethics (New York: Oxford University Press, 3rd ed., 1989): At 258–59.Google Scholar
See Morreim, , supra note 18; and Morreim, E.H., “Fiscal Scarcity and the Inevitability of Bedside Budget Balancing,” Archives of Internal Medicine, 149 (1989): 1012–15.Google Scholar
See Weiner, Lissovoy, , supra note 9, at 76–77.Google Scholar
Morreim, E.H., “Redefining Quality by Reassigning Responsibility,” American Journal of Law & Medicine, XX (1994): 79–104.CrossRefGoogle Scholar
See Beauchamp, Childress, , supra note 19, at 259.Google Scholar
Capron, A.M., “Medical Futility: Strike Two,” Hastings Center Report, 24, no. 5 (1994): 42–43.Google Scholar
Emanuel, E.J. Emanuel, L.L., “The Economics of Dying: The Illusion of Cost Savings at the End of Life,” N. Engl. J. Med., 330 (1994): 540–44.CrossRefGoogle Scholar
Although bone marrow transplant is often used for breast cancer, its safety and effectiveness have still not been proved. Because it is so widely available through insurers, relatively few women are willing to enter a scientific trial in which they might receive standard treatment rather than the transplant. Hence, it is very difficult to recruit enough subjects to complete scientific trials. See Kolata, G., “Women Rejecting Trials for Testing a Cancer Therapy,” New York Times, Feb. 15, 1995, at A1, B7.Google Scholar
Morreim, E.H., “Futilitarianism, Exoticare, and Coerced Altruism: The ADA Meets Its Limits,” Seton Hall Law Review, 25 (1995): 883–926.Google Scholar
See Morreim, , supra note 18, at 79–81.Google Scholar
Id. at 74–76.Google Scholar
For an excellent discussion of the role of contract in health care and health reform, see Havighurst, C.C., Health Care Choices: Private Contracts as Instruments of Health Reform (Washington, D.C.: American Enterprise Institute, 1995).Google Scholar
This notion somewhat parallels Havighurst's concept of health care contracts as a covenant among subscribers. See Havighurst, , supra note 30, at 176ff.Google Scholar
Eddy, D.M., “Connecting Value and Costs: Whom Do We Ask, and What Do We Ask Them?,” JAMA, 264 (1990): 1737–39; and Eddy, D.M., “What Do We Do About Costs?,” JAMA, 264 (1990a): 1161, 1165, 1169, 1170.CrossRefGoogle Scholar
Peters, W.P. Rogers, M.C., “Variation in Approval by Insurance Companies of Coverage for Autologous Bone Marrow Transplantation for Breast Cancer,” N. Engl. J. Med., 330 (1994): 473–77.Google Scholar
The doctrine is called contra proferentum. See Havighurst, , supra note 30, at 182ff.Google Scholar
Leonhardt v. Holden Business Forms Co., 828 F. Supp. 657 (D. Minn. 1993).Google Scholar
Id.; Wilson v. Group Hospitalization, 791 F. Supp. 309 (D.D.C. 1992); and Weaver v. Phoenix Home Life Mut. Ins. Co., 990 F.2d 154 (4th Cir. 1993).Google Scholar
Grumet, G.W., “Health Care Rationing Through Inconvenience: The Third Party's Secret Weapon,” N. Engl. J. Med., 321 (1989): 607–11; and Light, D.W., “Life, Death and the Insurance Companies,” N. Engl. J. Med., 330 (1994): 498–500.CrossRefGoogle Scholar
For a more detailed discussion of judge-made insurance, see, for example, Abraham, K.S., “Judge-Made Law and Judge-Made Insurance: Honoring the Reasonable Expectations of the Insured,” Virginia Law Review, 67 (1981): 1151–91; Ferguson, J.H. Dubinsky, M. Kirsch, P.J., “Court-Ordered Reimbursement for Unproven Medical Technology: Circumventing Technology Assessment,” JAMA, 269 (1993): 2116–21; Hall, Anderson, , supra note 32; James, F., “The Experimental Treatment Exclusion Clause: A Tool for Silent Rationing?,” journal of Legal Medicine, 12 (1991): 359–418; Havighurst, , supra note 30; Kalb, P.E., “Controlling Health Care Costs by Controlling Technology: A Private Contractual Approach,” Yale Law journal, 99 (1990): 1109–26; Huber, P., Liability: The Legal Revolution and Its Consequences (New York: Basic Books, 1988); Gottsegen, S.W., “A New Approach for the Interpretation of Insurance Contracts—Great American Insurance Co. v. Tate Construction Co.,” Wake Forest Law Review, 17 (1981): 140–52; and Great American Ins. Co. v. C.G. Tate Const., 279 S.E.2d 769 (N.C. 1981).CrossRefGoogle Scholar
DiDomenico v. Employers Co-op. Industry Trust, 676 F. Supp. 903, 908 (N.D. Ind. 1987).Google Scholar
Bailey, 866 F. Supp. at 280.Google Scholar
See Arkansas BCBS v. Long, 792 S.W.2d 602 (1990); and Blue Cross and Blue Shield v. Brown, 800 S.W.2d 724 (Ark. App. 1990) (each overrules the insurer's provision that all coverage would be forfeit if the patient left the hospital against medical advice).Google Scholar
See commentators on judge-made insurance law, supra note 40.Google Scholar
Firestone Tire & Rubber Co. v Bruch, 489 U.S. 101 (1989). See also Wiehl, et al., supra note 46, at 23; Younger, Conner, Cartwright, , supra note 46, at 11; and Johnson v. Dist. 2 Marine Eng. Ben. Ass'n, 857 F.2d 514, 517 (9th Cir. 1988).Google Scholar
The deference accorded to fiduciary administrators is reduced if those administrators are in a conflict of interest, as is the case when they represent both the individual beneficiaries' interests and the plan's profitability interests. See Firestone Tire, 489 U.S. at 101; Brown v. Blue Cross & Blue Shield of Ala., 898 F.2d 1556 (11th Cir. 1990); Pitman, 24 F.3d at 118; and Doe v. Group Hospitalization & Med. Serv., 3 F.3d 80 (4th Cir. 1993).Google Scholar
Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724 (1984).Google Scholar
See Butler, S.M., “A Tax Reform Strategy to Deal with the Uninsured,” JAMA, 265 (1991): At 2543; and Goodman, J.C. Musgrave, G.L., Patient Power (Washington, D.C.: Cato Institute, 1992): At 197–98, 340–50.CrossRefGoogle Scholar
“The ‘pre-emption clause’ (§ 514(a)) [of ERISA] provides that ERISA supersedes all state laws insofar as they ‘relate to any employee benefit plan.”’ See Pilot Life Ins. Co., 481 U.S. at 41.Google Scholar
Mertens v. Hewitt Associates, 113 S. Ct. 2063 (1993); Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134 (1985); and Novak v. Andersen Corp., 962 F.2d 757, 760 (8th Cir. 1992). See also Younger, Conner, Cartwright, , supra note 46, at 6.Google Scholar
Johnson, 857 F.2d at 514.Google Scholar
Kuhl v. Lincoln Nat. Health Plan, 999 F.2d 298 (8th Cir. 1993).Google Scholar
Spain v. Aetna Life Ins. Co., 11 F.3d 129 (9th Cir. 1993), cert. denied, 61 U.S.L.W. 3705 (U.S. Apr. 25, 1994); and Sweeney v. Gerber Products Co. Med. Ben. Plan, 728 F. Supp. 594 (D. Neb. 1989). Numerous other cases also preempt common law claims against ERISA plans.Google Scholar
Corcoran v. United Healthcare, Inc., 965 F.2d 1321, 1338 (5th Cir.), cert. denied, 113 S. Ct. 812 (1992).Google Scholar
DiDomenico v. Employers Co-op. Industry Trust, 676 F. Supp. 903 (N.D. Ind. 1987).Google Scholar
Leonhardt v. Holden Business Forms Co., 828 F. Supp. 657 (D. Minn. 1993); Nesseim v. Mail Handlers Ben. Plan, 792 F. Supp. 674, 675 (D.S.D. 1992); Pirozzi v. Blue Cross-Blue Shield of Va., 741 F. Supp. 586 (E.D. Va. 1990); and Wilson v. Group Hospitalization, 791 F. Supp. 309 (D.D.C. 1992).Google Scholar
Brown v. Blue Cross & Blue Shield of Ala., 898 F.2d 1556, 1561–62 (11th Cir. 1990). See also Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989).Google Scholar
Wilson, 791 F. Supp. at 309; Bailey v. Blue Cross/Blue Shield of Va., 866 F. Supp. 277 (E.D. Va. 1994); Calhoun v. Complete Health Care, Inc., 860 F. Supp. 1494 (S.C. Ala. 1994); Pitman v. Blue Cross & Blue Shield, 24 F.3d 118 (10th Cir. 1994); and Doe v. Group Hospitalization & Med. Serv., 3 F.3d 80 (4th Cir. 1993).Google Scholar
Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 147 (1985) (cited with approval in Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54 (1987)). See also Harsch v. Eisenberg, 956 F.2d 651 (7th Cir. 1992); and Novak v. Andersen Corp., 962 F.2d 757 (8th Cir. 1992).Google Scholar
Mertens v. Hewitt Associates, 113 S. Ct. 2063 (1993).Google Scholar
Haywood v. Russell Corp., 584 So. 2d 1291, 1297 (Ala. 1991) (citing House Education and Labor Committee, regarding ERISA's intent).Google Scholar
Id.Google Scholar
See, for example, Insinga v. LaBella, 543 So. 2d 209 (Fla. 1989); and Clark v. Southview Hosp. & Family Health Ctr., 628 N.E.2d 46 (Ohio 1994).Google Scholar
Boyd v. Albert Einstein Med. Center, 547 A.2d 1229 (Pa. Super. 1988); and Independence HMO, Inc. v. Smith, 733 F. Supp. 983 (E.D. Pa. 1990).Google Scholar
Albain v. Flower Hosp., 553 N.E.2d 1038 (Ohio 1990).Google Scholar
Elsesser v. Hospital of Philadelphia College, 802 F. Supp. 1286 (E.D. Pa. 1992); and Independence HMO, Inc., 733 F. Supp. at 983; and McClellan v. Health Insurance, 604 A.2d 1053 (Pa. Super. 1992) (reinstating claims against HMO for ostensible agency, though raising health plan's ERISA status as a question of fact for the jury. If applicable, ERISA could preempt the suit); DeGenova v. Ansel, 555 A.2d 147 (Pa. Super. 1988) (against an insurer); Kearney v. U.S. Healthcare, 859 F. Supp. 182 (E.D. Pa. 1994); and Paterno v. Albuerne, 855 F. Supp. 1263 (S.D. Fla. 1994). It should be noted that a number of the decisions ascribing ostensible agency for HMOs do not involve ERISA law: Schleier v. Kaiser Foundation Health Plan, 876 F.2d 174 (D.C. Cir. 1989); Dunn v. Praiss, 606 A.2d 862 (N.J. Super. A.D. 1992); Sloan v. Metro. Health Council, 516 N.E.2d 1104 (Ind. App. 1 Dist. 1987); Albain, 553 N.E.2d at 1038; and Boyd, 547 A.2d at 1229.Google Scholar
Blue Cross and Blue Shield v. Brown, 800 S.W.2d 724 (Ark. App. 1990); Elsesser, 802 F. Supp. at 1286; Clark, , 628 N.E.2d at 46; DeGenova, 555 A.2d at 147; McClellan, 604 A.2d at 1053; and Independence HMO, Inc., 733 F. Supp. at 983.Google Scholar
Cases in which district courts' judge-made insurance was overturned at the circuit level include: Harris v. Blue Cross Blue Shield of Mo., 995 F.2d 877 (8th Cir. 1993); Fuja v. Benefit Trust Life Ins. Co., 18 F.3d 1405 (7th Cir. 1994); Nazay v. Miller, 949 F.2d 1323 (3d Cir. 1991); and Nesseim v. Mail Handlers Ben. Plan, 995 F.2d 804 (8th Cir. 1993).Google Scholar
Loyola University of Chicago v. Humana Ins. Co., 996 F.2d 895 (7th Cir. 1993).Google Scholar
Id. at 903.Google Scholar
Fuja, 18 F.3d at 1412.Google Scholar
McGee v. Equicor-Equitable HCA Corp., 953 F.2d 1192 (10th Cir. 1992) (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989)). The Tenth Circuit did require the HMO to pay for some benefits that, in fact, met their utilization requirements.Google Scholar
Loyola University of Chicago v. Humana Ins. Co., 996 F.2d 895, 903 (7th Cir. 1993).Google Scholar
Fuja, 18 F.3d at 1407.Google Scholar
McGee v. Equicor-Equitable HCA Corp., 953 F.2d 1192, 1207 (10th Cir. 1992) (emphasis added).Google Scholar
Id.Google Scholar
Nazay v. Miller, 949 F.2d 1323, 1336 (3d Cir. 1991). The court went on to note that it is legitimate for those who pay for health care to attempt to contain their rising costs (id. at 1328). In this case, a corporation gave teeth to their precertification requirement by imposing a 30 percent penalty on those who failed to comply. Were this requirement overruled, the corporation “and its employees would be deprived of an important weapon in their joint battle against rising healthcare costs” (id. at 1338).Google Scholar
New York Life Ins. Co. v. Johnson, 923 F.2d 279, 284 (3d Cir. 1991).Google Scholar
King v. Collagen Corp., 983 F.2d 1130, 1137–38 (1st Cir. 1993). Along a similar line, a Maryland district court noted that “[b]ecause ERISA cases frequently touch ‘our human sympathies,’ courts of appeals have cautioned judges ‘to take care, for the general good of the community, that hard cases do not make bad law.”’ See Adelson v. GTE Corp., 790 F. Supp. 1265, 1274 (D. Md. 1992).Google Scholar
Barnett v. Kaiser Foundation Health Plan, Inc., 32 F.3d 413 (9th Cir. 1994).Google Scholar
Id. at 414.Google Scholar
The criteria were taken largely from other medical centers, including the University of California at San Francisco and the University of Pittsburgh. Id. at 417.Google Scholar
Id.Google Scholar
The court explicitly noted that “[t]here is no evidence that the decision was motivated by financial concerns for cost savings to the Kaiser Health Plan” (id.) and “that the decision was made ... that the procedure was not medically appropriate for Barnett, rather than a cost savings to the Kaiser Plan” (id. at 416). However, although it noted that the decision was based on medical rather than financial criteria, the court did not actually reject financial considerations.Google Scholar
In Goepel, a New Jersey district court openly acknowledged financial resource constraints. Noting that new technologies not only save lives but also drive the cost of medical care beyond some citizens' reach, the court pointed out that “rationing ... already is, and may well remain, a reality until further technological, scientific, or social advances reduce, rather than escalate, health care costs.” The court went on to uphold a denial of coverage for bone marrow transplant for breast cancer, based on an unambiguous policy exclusion. See Goepel v. Mail Handlers Ben. Plan, No. 93–3711, 1993 WL 384498 (D.N.J. Sept. 24, 1993). The case was reversed and remanded on appeal, but, for reasons of jurisdiction, not of substance. See Goepel v. Mail Handlers Ben. Plan, 36 F.3d 306 (3d Cir. 1994).Google Scholar
Johnson v. Dist. 2 Marine Eng. Ben. Ass'n, 857 F.2d 514, 517 (9th Cir. 1988). Likewise, the Corcoran court noted that “in any plan benefit determination, there is always some tension between the interest of the beneficiary in obtaining quality medical care and the interest of the plan in preserving the pool of funds available to compensate all beneficiaries.” See Corcoran v. United Healthcare, Inc., 965 F.2d 1321, 1338 (5th Cir.), cert. denied, 113 S. Ct. 812 (1992).Google Scholar
Brown v. Blue Cross & Blue Shield of Ala., 898 F.2d 1556, 1567 (11th Cir. 1990) (emphasis added).Google Scholar
Ricci v. Gooberman, 840 F. Supp. 316, 317 (D. N.J. 1993). See also Dukes v. U.S. Health Care Systems of Pennsylvania, 848 F. Supp. 39, 43 (E.D. Pa. 1994), as quoted supra note 77.Google Scholar
Mertens v. Hewitt Associates, 113 S. Ct. 2063, 2072 (1993).Google Scholar
Pereira by Pereira v. Kozlowski, 996 F.2d 723, 727 (4th Cir. 1993).Google Scholar
The Fourth Circuit acknowledged this principle of formal justice quite explicitly. The plaintiff contended that, because two consulting physicians within the plan had disagreed about what length of psychiatric hospitalization should be granted, the plan was arbitrary in opting for one physician's recommendation over the other. The court rejected this argument. The charge of inconsistency applies not to this situation, but to “inconsistent applications of the Plan to members suffering from the same or similar ailments.” See Sheppard & Enoch Pratt Hasp. v. Travelers Ins. Co., 32 F.3d 120, 126 (4th Cir. 1994). In other words, the court identified judicially unacceptable inconsistency in terms of formal (in)justice: Treating similar patients differently.Google Scholar
Eighty-four percent of businesses that provide health insurance for their employees only provide one choice—take it or leave it—and many of the remaining businesses provide only a few options. See Blendon, R.J. Brodie, M. Benson, J., “What Should be Done Now that National Health System Reform is Dead?,” JAMA, 273 (1995): At 243.Google Scholar
See Morreim, E.H., “Diverse and Perverse Incentives of Managed Care,” Widener Law Symposium Journal, (1995): Forthcoming.Google Scholar
Morreim, E.H., “Rationing and the Law,” in Strosberg, M.A. et al., eds., Rationing America's Medical Care: The Oregon Plan and Beyond (Washington, D.C.: Brookings Institution, 1992): At 162–63; Morreim, E.H., supra note 18, at 58–60, 89–90, 143–47; and Havighurst, , supra note 30.Google Scholar
See Havighurst, , supra note 30, at 222ff.Google Scholar
See Kalb, , supra note 40, at 1121–24.Google Scholar
See Hall, Anderson, , supra note 32.Google Scholar
Hall and Anderson, for instance, lay out a fairly specific set of procedures by which a health plan might adjudicate which interventions are covered and which experimental. See Hall, Anderson, , supra note 32.Google Scholar
In the current situation, unfortunately, adequate disclosure is not always made, and deficiencies in contracting procedures are not limited to ambiguities in contractual language. Many MCOs, for instance, do not disclose their cost-containment policies, such as incentive systems that reward physicians for conservative care, or therapeutic substitution protocols that replace brand name medications with cheaper pharmacologic equivalents. Although at present no statutory requirements for such disclosure exist, there are strong reasons based in both fiduciary law and contract law for believing that they should be made. See Morreim, E.H., “Economic Disclosure and Economic Advocacy: New Duties in the Medical Standard of Care,” Journal of Legal Medicine, 12 (1991): 275–329; Hirshfeld, E.B., “Should Third Party Payors of Health Care Services Disclose Cost Control Mechanisms to Potential Beneficiaries?,” Seton Hall Legislative Journal, 14 (1990): 115–50; Figa, S.F. Tag, H.M., “Redefining Full and Fair Disclosure of HMO Benefits and Limitation,” Seton Hall Legislative Journal, 14 (1990): 151–57; Tiano, L.V., “The Legal Implications of HMO Cost Containment Measures,” Seton Hall Legislative Journal, 14 (1990): 79–102; Chittenden, , supra note 56; Glover, G.J. Kuhlik, B.N., “Potential Liability Associated with Restrictive Drug Policies,” Seton Hall Legislative Journal, 14 (1990): 103–13; and Havighurst, , supra note 30, at 27, 122, 143–47, 185, 311.CrossRefGoogle Scholar
Madden v. Kaiser Foundation Hosps., 552 P.2d 1178 (Cal. 1976).Google Scholar
See Eddy, (1990), supra note 34; Eddy, (1990a), supra note 34; Leahy, R.E., “Rational Health Policy and the Legal Standard of Care: A Call for Judicial Deference to Medical Practice Guidelines,” California Law Review, 77 (1989): 1483–528; Menzel, P.T., Strong Medicine (New York: Oxford University Press, 1990): At 10ff.; Hall, , supra note 16, at 39; Kalb, , supra note 40, at 1125; Hall, Anderson, , supra note 32, at 1676; and Havighurst, , supra note 30, at 28, 159.Google Scholar
“Interpreting insurance contracts as mutual contracts rather than as contracts of adhesion would by no means require that courts abandon their equitable responsibilities. It would require, however, that they refuse to honor unreasonable expectations and refuse to find advantages where none exist. It would require, in short, the curtailment of judge-made insurance.” See Kalb, , supra note 40, at 1125.Google Scholar
Madden, 552 P.2d at 1178.Google Scholar